Seven million people who were mis-sold insurance alongside credit and debit cards have moved a step closer to receiving compensation after creditors with the firm CPP voted overwhelmingly in favour of payouts.

The compensation scheme, which concerns only customers who bought policies after 14 January 2005, had to be put to a vote, and on Thursday CPP announced that 98% of votes were in favour of accepting it. Although only 18% of those eligible to vote did so, the scheme will now go forward to be approved by the high court, with a hearing scheduled for 14 January. After that, customers will be sent forms to submit if they want to make a mis-selling claim, and payments will start in early March.

Card cover cost about £30 a year while identity protection cost around £80 and customers are expected to receive around £185 each. CPP has said it expects to spend £65.8m on compensation and associated costs, and the total cost to the industry has been put at up to £1.5bn.

Brent Escott, CPP's chief executive, said: "A key priority is to achieve the best outcome for customers affected by the historical issues in the UK business and customer approval for the scheme marks a further step forward in this process.

"Whilst the group will continue to face significant risks and uncertainties in the short to medium term, we continue to work closely with our stakeholders to complete the scheme and provide a stable platform from which the business can look forward."